Export without loss of liquidity

Jul 03, 2015 03:21 PMSERV

Swiss exporters often have to back down in contractual negotiations if they want to prevail over their international competition. For instance, they have to forgo down payments. Particularly SMEs lack money for their production in this case. SERV offers a solution to this problem.

The Swiss PME, Tec-Sem AG, operates in a highly competitive niche market. Contractual negotiations are tough, especially on the financial level. If Tec-Sem wants to stand out against its international competition, it does not have any leeway in the negotiations surrounding the contract. As a consequence, buyers do not make any down payments and the exporter does not have access to this funding during the production stage. This was the case when a semiconductor manufacturer in Taiwan ordered a storage system for photomasks.

Liquidity thanks to SERV insurance
A working capital insurance from SERV covered the loan of 750,000 Swiss francs to finance the manufacturing costs. This allowed Tec-Sem to obtain the loan without providing further collateral and thus without experiencing a liquidity squeeze. SERV covered the production risks itself with a pre-shipment risk insurance. The manufacturing costs of 189,000 Swiss francs are thus insured against political risks in Taiwan as well as against non-payment of the Taiwanese buyer. Thanks to SERV's support, Tec-Sem can carry out this export transaction without putting its money at risk nor losing its liquidity.

Swiss know-how
Thanks to its Swiss know-how, Tec-Sem has established itself as a leading supplier of automation solutions for the semiconductor and electronics industry. Tec-Sem produces wafer-transfer systems and other high-tech solutions for handling semiconductor wafers and photomasks (reticles). The firm is based in Tägerwilen in the Canton of Thurgau and has around 35 employees in Switzerland.